Bally’s Corporation stands by the long-term prospects of its igaming unit of Gamesys Group, navigating the transformative headwinds of the UK market under regulatory review.
The heritage US gambling operator purchased Gamesys back in October 2021, when the UK government was around halfway through the review of the 2005 Gambling Act, seeking to upgrade the nation’s betting regulatory framework to meet the digital changes of recent years.
Now published, the White Paper has entered the consultation phase of its planned reforms to be reviewed by stakeholders. In a conference call with investors, Bally’s CEO Robeson Reeves outlined that the firm plans to actively work with British authorities.
“We continue to review the proposed measures and will work constructively with both the government and Gambling Commission to find an effective solution which ensures that reforms are appropriate and guarantee a safe and sustainable future,” he said.
“As we discussed on our last earnings call, we’re in a strong position as we’ve been preparing our business strategy and compliance for some time. We embrace regulation and recognise that gaming is a public private partnership.”
Regulatory uncertainties in the UK remain a challenge, but the market still poses opportunities for compliant businesses which can find the right edge, Roe emphasised to investors. As such, regulatory difficulties are causing competitors to leave, reducing competition and opening up the market for firms which continue to compete.
Recent examples include Esports Entertainment Group (EEG) closed down its UK-facing SportNation and RedZone Sports brands, part of a wider rollback of its B2C operations to focus more on B2B activity, particularly in the US.
“At its core international interactive businesses perform very well, especially in the UK, where we continue to gain incremental market share,” the CEO continued.
“The regulatory environment in the UK challenges smaller competitors causing some to leave. This allows compliant large entities to consolidate the market and expand their reach.”
Bally’s operations in the UK chiefly revolve around igaming, with its Gamesys subsidiary operating online casino brands such as Virgin Casino and Monopoly Casino.
Offering a numerical perspective, Bally’s Chief Financial Officer, Marcus Glover, echoed Roe’s confidence in the group’s continued UK momentum. In particular, he stated that the firm believes the UK White Paper ‘won’t have a material impact on our international interactive financial results’.
Confident in its global proceedings, Bally’s maintains its guidance for the remainder of 2023, forecasting between $2.5bn-$2.6bn in revenue and $685m-$700m in adjusted EBITDA by the end of the year.
Some investors did require further reassurance on the call though. In response to one question, Roe reaffirmed his confidence that ‘trends will continue’ in the UK, as the firm continues to take share from ‘smaller players and actually some big players too’.
He remarked: “The consolidation in the market will continue to track on and we’re seeing high volumes of new customers coming into us, which is a great tailwind which will boost the sport, we don’t see that trend going away.”
The CEO concluded that Bally’s is ‘very confident in our future and our core markets that are very robust and will build out other growth opportunities”.
As the White Paper was published just a few months ago, its impact on the UK betting and gaming sector is yet to be seen.
It is also unclear when the proposals will be fully implemented into law, with the first round of DCMS and UKGC consultations having opened just last week, focusing chiefly on finance risk checks and slot stake limits. The second round of consultations will subsequently revolve around the imposition of a research, education and treatment (RET) levy.